Ben Bennett, principal of Aylesbury College, has been put on paid leave while an investigation is carried out into management of student information, such as attendance rates. It follows repeated calls from the Further Education Funding Council for accurate information on the Buckinghamshire college's performance.
The suspension by the governors is believed to be the first under a new tougher FEFC regime which aims to put pressure on the governors to act directly and account for failures to provide adequate data.
Mr Bennett, a high-profile principal, was until recently president of the Association of Principals of Colleges and was well-known on the lecture circuit, where others say he represented his college as being a model of good standards.
Chair of governors, Stuart Farrant, said: "There are a number of issues, particularly the quality of management information as reported to the governing body. The thing that is giving us greatest difficulty at the moment is data on students."
Mr Farrant expressed sympathy for college principals' difficult role handling of management information systems.
"The FEFC's way of collecting data is so complex, that it is virtually impossible to deal with it. If something is too complex to write out in reasonable time on a piece of paper, it is wrong," he said.
He added:"There are several issues, and the consequences of the malfunctioning system is just one of them. Even with the problems in the software, there should have been other systems, back-ups, which we don't appear to have."
A recent FEFC inspection report gave the college a grade 3 for management and 2 for governance. But such grades have rarely been a reliable indicator of impending problems.
Mr Farrant said he did not expect a wider investigation to result from the current inquiry.